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Google pays Apple $100M/year for search on iPhone - rumor

Having Google as the default search engine on the iPhone is rumored to earn Apple more than $100 million per year in a revenue sharing deal between the two companies, a new report alleges.

Downplaying rumors that Apple could be working on its own search engine, Silicon Alley Insider cited an anonymous source Thursday as stating that the iPhone maker has no intention of getting into the business that Google dominates. That same source claimed that Apple earns more than $100 million a year in a revenue sharing deal with Google.

In addition to being the search provider for Safari on the iPhone, Google also powers the native Maps application included with Apple's handset. The source claimed that making Google Maps a provider for the initial iPhone in 2007 was a simple two-week process. But when GPS was added to the iPhone 3G, negotiations between the two technology giants allegedly lasted six months.

"Google wanted access to all sorts of data from the maps, but Apple didn't want to give it up, according to this person," the report said.

While the $100 million in annual revenue is cited as a reason for Apple to not develop its own search engine, it's also a fraction of the $15.68 billion the company posted in revenue last quarter alone.

The news follows rumors from weeks ago that Apple and Microsoft were in talks to make its Bing search engine the default provider for the iPhone. Control of the handset's Maps application was also said to be a part of those ongoing discussions.

In spite of their ongoing partnership, a perception of rivalry between Apple and Google has grown in the public's eye since Google CEO Eric Schmidt resigned from Apple's board of directors last August. Both Google and Apple were the subjects of a Federal Trade Commmission investigation for potential antitrust ties. Schmidt chose to resign because Google's Android mobile operating system and forthcoming Chrome OS netbook operating system look to compete with Apple's iPhone and Mac OS X, respectively.

Apple, too, showed signs in 2009 that it intends to tread into Google's territory soon. Last summer, Apple purchased Google Maps competitor Placebase. Later in the year, it sought to hire a full-time employee to take its iPhone Maps application "to the next level."

Apple has also entered the mobile advertising business after its purchase of Quattro Wireless, believed to be worth $275 million, in December. Through the acquisition, Apple also named the former CEO of Quattro Wireless, Andy Miller, to a new position: vice president of Mobile Advertising.